A budget for the Conservatives to run on

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The Gazette, Wednesday, March 23, 2011

Jim Flaherty's sixth budget isn't about economic policy or fiscal frameworks. It's a political statement, one to run on in an election in the event the government is defeated on it.

And it may well be, after Jack Layton jumped his own gun and announced in the lobby of the Commons Tuesday that the NDP would "not be supporting the budget in its present form."

Would he be open to amendments? Sure, but he couldn't really see how an election could be avoided at this point.

The NDP had put it out that Layton would sleep on it Tuesday night, and announce his decision after meeting his caucus on Wednesday morning. But that's Layton for you.

This is a budget for the Conservatives to campaign on, a consumer budget aimed squarely at middle-class voters and families. Consider, for example the Children's Arts Tax Credit of up to $500 of expenses for children under 16.

At my house, we are calling this Zara's Music Lessons.

And then there's the Family Caregiver Tax Credit of $2,000 for caregivers of dependent relatives, including spouses, common-law partners and even children. This steals a march from Michael Ignatieff 's campaign drumbeat of Families First.

There was quite a bit for Layton to chew on, but apparently not enough for him to buy into.

For openers, there was an increase in the Guaranteed Income Supplement for seniors whose only pension is from government. The top-up of $600 a year - $50 a month - for single seniors, who are mostly women, is a real number. Couples will receive an additional $840 a year, or $70 a month. That was one of the items on Layton's wish list.

Another was the renewal of the wildly popular homereno plan - think Canadian Tire or Home Depot on a Saturday morning. It's in the budget too: $400 million for the EcoEnergy Retrofit program to make homes more energy-efficient.

Then Ottawa will forgive $40,000 in student loans for new doctors, and $20,000 for nurses, who agree to live in remote or rural communities. This counts as a half-win for Layton - he had wanted the feds to hire thousands of new doctors and nurses, though he didn't say where Ottawa would find them, and ignored the constitutional fact that health care is a provincial jurisdiction. But who can be against forgiving student loans as an incentive to locate in small towns and farming communities?

Layton had two other demands - increasing contributions to the Canada Pension Plan and exempting home fuel from sales tax - that Flaherty has ruled off the table for constitutional reasons in the first instance and technical ones in the second.

So that made 2 of five demands met. Or 2 out of three doables. That should have been enough for Layton.

He's the guy who's been going around saying we have to make Parliament work. Here was his opportunity. While the Liberals recklessly want to plunge the country into an unwanted election, Layton had a chance to be the real opposition leader in a minority House, getting a better deal from the government for those who need it most.

For the rest, Flaherty's budget consultations targeted Canada's 525,000 small businesses, and it shows in the hiring credit for small business, exempting companies from paying employment-insurance premiums for a year. He's also extended the capital cost allowance on manufacturing or processing machinery and equipment for another two years.

Otherwise, the land is strong. The deficit for the year ending next week is, at $40 billion, $6 billion lower than forecast. And the fiscal framework is now expected to move to a $4-billion surplus in four years. Canada has come out of the recession in better shape than any other country in the G7. Since the beginning of the recovery in July 2009, the economy has created 480,000 new jobs, "more than were lost during the recession," as Flaherty pointed out in his budget speech.

This is a very smart budget, indeed one to run on.

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